Lehman Brothers denied last night that it had sought emergency help from the Federal Reserve as a swirl of rumours sent its share price tumbling.

Shares in the blue chip Wall Street firm slumped by as much as 15% at one stage amid speculation that it needs to raise billions of dollars to repair its balance sheet.

In response, Lehman tried to crush speculation that it would repeat the trauma of Bear Stearns, which was sold to JP Morgan in a cut-price deal.

In a statement released to the media, it said insisted that its liquidity levels were strong and had actually grown in recent months.

"We did not access the [Federal Reserve's] primary dealer facility today," a Lehman spokesman said in a statement.

"The last time we accessed the facility was on April 16, for testing purposes. We ended the first quarter with liquidity of $34 billion and finished the second quarter with well over $40 billion," the firm continued.

Shares in Lehman closed down 9.5% last night at $30.61, as traders feared that it may have sustained further damage through the credit crunch.

The Wall Street Journal has reported that Lehman is considering raising up to $4bn in fresh capital, and also claimed that the bank will post a greater-than-expected loss for the second quarter, later this month.

But some analysts are unconvinced that Lehman needs a capital injection.

"In our view, there is no immediate need to raise equity capital, and the company would only take this painful step in an effort to cease the drumbeat of negative perceptions," said David Trone, an analyst for Fox-Pitt, Kelton.